Wednesday, April 23, 2014

Ericsson Q1 Sales Dip 7% as North America Projects Completed

Ericsson reported Q1 2014 net sales of SEK 47.5 billion (US$7.22 billion) , down 9% in absolute terms from a year earlier and down 7% in constant currency as network construction projects for two large mobile operators in North America peaked. Ericsson also saw lower sales activity in Japan, which was partially offset by growth in China, parts of the Middle East and Latin America. The decline in sales impacted segment Networks as well as the Global Services network rollout business.


Operating margin improved YoY in all segments to 5.5% (4.0%) mainly driven by mobile broadband capacity sales and lower restructuring charges.

Some highlights:

  • The SSR 8000 router now has 109 contracts signed since it was launched in December 2011. During the quarter 13 new contracts were signed of which 5 were for fixed networks.
  • Ericsson’s LTE business maintained steady YoY while the related adoption of VoLTE contributed to sequential growth in both IP Multimedia Systems (IMS) and User Data Consolidation (UDC), required to support multi-access converged network services.
  • Global Services sales declined QoQ after a strong Q4 and due to reduced activities in Network Rollout. Ericsson signed 16 new Managed Services contracts in Q1 2014, compared with 21 new contracts in the same period of 2013.



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